Honda has released its Insight hybrid onto the Japanese market, despite the poor economic climate. The vehicle is now the cheapest hybrid on the market, undercutting the Toyota Prius, with a MSRP of 1.89 million yen or about $21,000 USD. The car will reportedly sell for under $20,000 in the U.S., which is the main market for the vehicle.

Honda says that it expects to sell about 200,000 Insights per year with 100,000 of the sales coming from the U.S. alone, Japan moving 50,000, and Europe moving the other 50,000 cars. Honda President Takeo Fukui said, "Pricing is key when we think about making the hybrid widespread. It has to be an appealing price. But it still must make sense for us as a business. It is a very ambitious goal."

The Insight has a fuel economy estimate of 43 MPG according to Honda, which would have been much more appealing before fuel prices dropped under the weight of a sagging economy. Honda's Norio Ano said, "If the Insight had gone on sale a half year earlier, it would have been such a sure hot-seller."

Toyota has announced a new larger and more expensive Prius for 2010. The expected new price point for the larger 2010 Prius puts an even larger gap between it and that of the Insight. To combat this gap, the Associated Press says that Toyota may continue to sell the old Prius alongside the new Prius as a lower cost alternative – at least in Japan.

Honda's Insight is set to hit the U.S. market in April and the European market in March.